Mercury Energy buys into Australian windfarm operator

Power company Mercury has taken a $143.9 million stake in an Australian-based windfarm operator.

Photo: 123rf

It is buying a 19.9 percent stake in Tilt Renewables from the Tauranga Electricity Consumers Trust (TECT) for $143.9 million. It has an option to buy another 6.8 percent at the same price within the next six months.

Mercury chief executive Fraser Whineray said Tilt would give it an entry into Australia's expanding renewable power sector and broaden its earnings.

"Tilt has established a robust portfolio of operating wind farms in both Australia and New Zealand, as well as consented renewable generation projects which it can bring to market when conditions are right."

He said Mercury might invest further as Tilt develops projects.

Earlier this month, Mercury said it planned to spend up to $50m to buy back up to 20 million of its shares.

It said it was a way of returning capital to shareholders while maintaining a flexible balance sheet.

Mercury has been flush with cash, having benefited from high prices and high sales volumes last year.

Tilt Renewables was split off from Tauranga based TrustPower two years ago, and recently reported a small annual loss.

TECT had plans to sell out of TrustPower last year so it could broaden its activities, but dropped the idea after strong opposition from consumers and from TrustPower.